Legends Hospitality has sold a minority interest in the company to New Mountain Capital, a New York investment firm.
New Mountain Capital manages private and public equity and credit funds valued at $15 billion, and its long-term strategy is to invest in family-run businesses such as Legends, according to Shervin Mirhashemi, Legends’ president and CEO. Legends’ primary owners are the Cowboys and Yankees, owned by the Jones and Steinbrenner families, respectively.
New Mountain replaces Checketts Partners Investment Fund as a third partner after Dave Checketts, Legends’ former chairman and CEO, left the firm in September 2015. It’s New Mountain’s first investment in a sports and entertainment property, Mirhashemi said.
As part of the transaction, Seth Bernstein, chairman and CEO of SMB Capital, takes over as Legends’ chairman of the board.
“When the company was founded about 10 years ago, the original structure was having a minority partner with the Cowboys and Yankees,” Mirhashemi said. “Up to about a year and a half ago, when Live Nation became a strategic partner, we haven’t had that additional investor. Meanwhile, we have experienced unprecedented growth and we thought it was time to start listening. We went through various talks with companies and ultimately landed on New Mountain. They will help us with capital projects. It will be no different for our clients. We just have more tools and financial capacity.”
Legends, founded in October 2008 by the Cowboys and Yankees and investment bank Goldman Sachs, has gone through multiple minority partners over the past nine years. Initially, CIC Partners filled the role until its principal Mike Rawlings was elected mayor of Dallas in 2011. The Checketts Partners Investment Fund replaced CIC Partners in January 2012. Mirhashemi, hired by Legends in July 2013 as president and chief operating officer, has held the top post over the past four years.
Legends is involved in many aspects of sports business, including feasibility studies and market research, food service, ticketing, sponsorships and premium seat sales. The company posted revenue of more than $700 million for fiscal 2016, officials said.
The New Mountain deal comes at a critical point for Legends, which has a pivotal role in the development of the new NFL stadium for the Los Angeles Rams and Los Angeles Chargers, plus Banc of California Stadium, the new MLS facility under construction next to Los Angeles Memorial Coliseum.
Overall, the capital infusion allows Legends to aggressively pursue new business against competitors such as AEG and Oak View Group, which is co-owned by sports executive Tim Leiweke and is an emerging player in the facility development space, industry experts said.
Last fall, Legends acquired International Stadia Group, a London-based sports and entertainment company, as part of its expansion into Europe, Africa and the Middle East. Legends is looking at making other acquisitions to support its client base, but to this point, no deals are imminent.
“That’s where our focus will be,” Mirhashemi said.
